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Personal Loan Agreement Template

Here's what you'll find in the Personal Loan Agreement:

  • A contract template for those lending or loaning to a friend or family member
  • Tips on things to avoid, key items to pay attention to, and general resources which may be helpful
  • Advice on getting contracts signed quickly, digitally, and legally
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Personal Loan Agreement Template

A personal loan agreement, or promissory note, is a legally binding contract typically entered into between family members and friends. A loan agreement details the repayment of the loan and other important terms and conditions. A written loan agreement is important because it protects the lender. The lender can rely on the terms of the agreement to enforce repayment of the loan. What is in this Personal Loan Agreement Template?

  • This personal loan agreement template was created to help you customize your own personal loan agreement.
  • Drafting tips on simple loan agreements
  • Details on how to get your Loan Agreement signed with ApproveMe

Why do you need a Personal Loan Agreement? A personal loan agreement is needed when money is loaned. Loans are also known as “notes.” The party lending the money is referred to as the lender, and the party borrowing the money is referred to as the borrower. A written personal loan agreement protects the lender if the borrower fails to pay or if the loan goes into default. A personal loan agreement should be in writing. This is for a few reasons:

  • Repayment terms are clearly defined
  • Parties are legally bound by the terms in the agreement
  • Protects the lender and provides a legal remedy

When lending or borrowing money from friends and family, it can be challenging to enter into a written contract because it is hard to imagine the deal will fall through. A written agreement illustrates the parties’ agreement and provides the lender with assurances if the borrower fails to repay the loan. What is a Personal Loan Agreement? A personal loan agreement lays out the terms of the loan. The agreement memorializes the borrower’s promise to repay the loan. The lender delineates the borrower’s financial obligations, and the parties agree to a payment plan. There are many types of loan agreements running from auto loans to business loans. However, personal loans are more flexible. Loans can either be secured or unsecured. Personal loan agreements are generally unsecured. However, when a loan is secured, the borrower places a piece of owned property as collateral. Therefore, if the borrower cannot make their payments or defaults, the lender takes possession and ownership of the property. For example, it may not be sufficient just to describe the collateral as “my truck” or “my green truck.” Instead, it should be listed with the year, make, and other details like “ silver Mercedes SLK 250.” The more detailed, the better to eliminate the potential of any confusion in the future. If the loan is secured, it is crucial to clearly identify and describe the property. If the borrower wants to list their truck as collateral, it should be specific and detailed. Sometimes personal loan agreements will include an interest clause. This is implemented when the lender wishes the borrower to pay a certain percentage of interest on a monthly, annual, or another agreed-upon basis. Other Names for a personal loan agreement include:

  • Promissory Note
  • Loan Contract
  • IOU
  • Simple Loan Agreement
  • Personal Payment Agreement
  • Installment Agreement

What Should be Included in a Personal Loan Agreement? Personal loan agreements are legally binding, so it is important to include certain elements to protect the parties to the agreement. Personal loan agreements will consist of unique clauses that may not be found in other contracts. Here are a few essential components of a simple personal loan agreement:

  • Parties to the agreement (Lender/Borrower)
  • Effective Date
  • Loan Amount (Financial Obligation/Amount of Money)
  • Payment Schedule, Installments, Payment Terms
  • Payment Due Dates (monthly, weekly, etc.) and Late Fees or other Penalties
  • Interest Rate (if applicable)
  • Collateral/Security (if applicable)
  • Dispute Resolution and Governing Law
  • Contact Information for the Borrower and Lender

The loan agreement should list the total amount of the loan. It should also specify if the repayment schedule requires a monthly payment or weekly payment. Common Mistakes to Dodge when Drafting a Personal Loan Agreement A personal loan agreement should incorporate any and all terms of the parties’ agreement. Some common mistakes in personal loan agreements include:

  • Leaving out the total loan amount
  • Failing to incorporate an attainable and reasonable payment plan
  • Omitting payment amounts, payment schedule, late payments, and late fees
  • Missing all appropriate signatures
  • Not reaching out to an attorney to obtain legal advice.

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Personal Loan Agreement

THIS PERSONAL LOAN AGREEMENT (“Agreement”) is being made between ________________________________ (the “Lender”) with an address of _____________________________________________________________________________________and ________________________________ (the “Borrower”) with an address of _____________________________________________________________________________________ on this _____ day of ______, 20___. IN CONSIDERATION THEREOF, The undersigned Lender and Borrower (collectively, the “Parties”) agree to the following: LOAN. The Lender agrees to lend the Borrower $__________________ ( the “Loan Amount”) on the terms and conditions set forth in this Personal Loan Agreement. FINANCIAL OBLIGATION. The Borrower agrees that the amount owed to the Lender is $___________________________ (“Debt Amount”). PAYMENT PLAN. The Parties hereby agree to the payment plan set forth in Exhibit A attached hereto. The Borrower hereby represents and warrants that the aforementioned payment plan was created in consideration for the Borrower to be able to make their obligated payments without causing further indebtedness or detrimental circumstances. INTEREST. The Loan Amount is subject to the following: [ ] The Borrower agrees to repay the Loan Amount at an interest rate of ______ % per ______ (month, year, other). [ ] Shall bear no interest. [ ] Other: ______________________________________________________________________ LATE FEE. If any payment under this Agreement are ____ day(s) past due, the Lender will: [ ] Charge a late fee of ____ % of the payment owed for each following day the payment is late. [ ] No late fee [ ] Other: ______________________________________________________________________ SECURITY: This Loan is: [ ] Secured. The property described as ______________________________________________ owned by the Borrower (the “Security”) that will transfer to the ownership and possession of the Lender. [ ] Unsecured. There will be no Security under this Personal Loan Agreement DEFAULT. In the event that the Borrower defaults on any payments and fails to cure the default within a reasonable amount of time, the Lender will have the option to accelerate and declare the entire remaining amount of the Principal and any accrued interest to be immediately due and payable. SEVERABILITY. In the event any part or provision of this Agreement is deemed unenforceable or invalid, in part or in whole, that part shall be severed from the remainder of the Personal Loan Agreement and all other parts or provisions shall continue in full force and effect as valid and enforceable. DISPUTE RESOLUTION. Parties to this Agreement shall first attempt to settle any dispute through a good-faith negotiation. If the dispute cannot be settled between the parties via negotiation, either party may initiate mediation or binding arbitration in the State of ________________. If the parties do not wish to mediate or arbitrate the dispute and litigation is necessary, this Agreement will be interpreted based on the laws of the State of _________________, without regard to the conflict of law provisions of such state. The Parties agree the dispute will be resolved in a court of competent jurisdiction in the State of ______________________. The prevailing party to the dispute will be able to recover its attorney’s fees and other reasonable costs for a dispute resolved by litigation or binding arbitration. GOVERNING LAW AND JURISDICTION. The laws of the State of _______________ shall govern as to the interpretation, validity, and effect of this Agreement. AMENDMENT, WAIVER, OR MODIFICATION. No provisions of this Agreement shall be amended, waived or modified except by any instrument in writing signed by all the parties hereto. NO ASSIGNMENT. The Parties agree that they shall not assign or encumber their rights and obligations under this agreement. ENTIRE AGREEMENT. This Agreement constitutes the sole and entire agreement of the Parties regarding the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, regarding such subject matter. This Agreement may only be amended, modified, or supplemented by an agreement in writing signed by each Party hereto. COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile. email, or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. ELECTRONIC SIGNATURES. This Agreement and related documents entered into in connection with this Agreement are signed when a party’s signature is delivered electronically, and these signatures must be treated in all respects as having the same force and effect as original signatures. MISCELLANEOUS. This Agreement cannot be changed, modified, terminated, canceled, rescinded, or in any other way altered or negated unless the same is in writing and signed by the party against whom enforcement of the change, modification, discharge, termination, cancellation, or rescission is sought. It is agreed that all understandings and agreements heretofore had between the parties are merged in this Agreement, which alone fully and completely expresses their understanding, and this Agreement has been entered into after full investigation and consideration, neither party relying upon any statement or representation, not embodied in this Agreement, which may be claimed to have been made by any of the parties hereto. IN WITNESS WHEREOF, the Borrower and the Lender have executed this Personal Loan Agreement the day and year first above written. Dated:_________________________________ ________________________________________ Lender’s Signature ________________________________________ Lender’s Printed Name Dated:_________________________________ ________________________________________ Borrower’s Signature ________________________________________ Borrower’s Printed Name Lender’s Contact Information: Address: ______________________________ ______________________________________ ______________________________________ Phone Number: _________________________ Email Address: _________________________ Borrower’s Contact Information: Address: ______________________________ ______________________________________ ______________________________________ Phone Number: _________________________ Email Address: _________________________ Exhibit A Payment Plan The parties hereby agree to the following payment plan: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Other: _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

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Frequently Asked Questions

What is a Personal Loan Agreement?

A personal loan agreement is a document that outlines the terms and conditions for a loan that is given to an individual. It includes the borrower’s name, the loan amount, the interest rate and repayment schedule.
Personal loans are used for different purposes such as home improvement, medical bills and emergencies. There are also some loans available for education expenses such as college tuition.

How do I write a Personal Loan Agreement?

A personal loan agreement is a contract between a borrower and a lender that outlines the terms of the loan, including interest rates, repayment terms, and other conditions. This document also includes information about how to repay the loan in full or make payments on it. It will also specify what happens if you default on your payments. You can start with the template on this page and customize it with your specific information.

Are personal loan agreements legal?

Personal loan agreements are legal agreements made between two or more parties. They are regulated by the law and must be followed in order to avoid legal problems later on. It is important to be aware of the law and how it impacts your personal loan agreement in order to avoid any unwanted consequences later on.

How do I draft a friendly personal loan contract?

A personal loan contract is an important legal document. Though it is serious in nature, it can still be drafted in a friendly manner. The following are some tips for drafting this type of contract:
- Be clear about your rights as a borrower
- Keep in mind that the lender will likely have their own set of rights as well
- Make sure that your loan contract includes an interest rate, repayment schedule, penalties for late payments, etc
- Take care to use language that is clear and concise

Does a personal loan agreement need to be notarized?

A personal loan agreement is a type of loan agreement in which the lender and the borrower agree to exchange money for goods or services. There are many benefits to having your personal loan agreement notarized, but it may not be necessary. The best thing to do is check the laws in your area to see if this document is required to be notarized.

What is the difference between a loan agreement and a promissory note?

A loan agreement is a legal document that is signed by the borrower and lender. It outlines the terms of the loan, including repayment schedules, interest rates, and collateral. A promissory note is a promise to pay back a certain amount of money on a certain date.
A promissory note is an agreement between two parties in which one party promises to repay another party an amount of money at some point in the future. It can be written as a check or as an IOU with some bank or financial institution.

how to write a loan agreement

A loan agreement is a legal document that outlines the terms of a loan. It can be used for loans of any amount, and it must be signed by both parties to make an enforceable contract.
The following are some important questions to consider when drafting a loan agreement:
- What is the purpose of the loan?
- Does the borrower have enough collateral to secure the loan?
- How long will it take for repayment?
- What interest rate does the borrower agree to pay?

how to write a loan agreement template

You can use the load agreement template on this page to start writing your loan agreement! Review the content and fill the bracketed sections with your own information, including the purpose of your loan, the amount of money borrowed, the interest rate, how long the loan will last, monthly payments, and what happens if you don’t repay your debt in time.

how to draw up a loan agreement between friends

A loan agreement is a legal document between two people who want to borrow money from one another. It outlines the terms of the loan and how it will be repaid. If you are loaning money to a friend, you should still get everything in writing and treat the interaction professionally. This way, you are both protected from any liabilities that may arise to prevent negative outcomes.

what is a demand loan agreement

Demand loan agreements are typically used for personal loans. While the borrower will make repayments on the loan in accordance to their income, the lender will only collect payments if the borrower fulfills their obligations.
In these types of loans, there is an understanding that the borrower may not be able to repay all of their outstanding debt and thus they are not eligible for a full refund.
Demand loans are typically unsecured loans, which means there is no collateral that backs the loan. This means that if you default on your payment plan, you will lose your property and assets to cover your debt.

what is a loan agreement and why is it important

A loan agreement is a written contract between a lender and a borrower that outlines the terms of the loan. It is an agreement that dictates how much money will be borrowed, when it will be paid back, and what interest rates will apply.
Loan agreements are important because they help protect both parties from future disputes and provide some peace of mind when making an investment in someone else's business.
The most important thing to remember when creating a loan agreement is to make it clear who will be responsible for paying back the loan. In this case, you would need to decide whether you want to be responsible or if you want your business partner to be.

how to make a personal loan agreement template

A free personal loan agreement template can be used to make a loan agreement between the lender and the borrower. The agreement should include all of the information such as what is being borrowed from the lender, when it will be repaid, and how much interest will be paid.

how to write a family loan agreement

A family loan agreement is a legal document that sets out the terms and conditions of a loan between family members.
The main purpose of this agreement is to protect both parties involved in the transaction. It outlines what each party will do with their money and property, as well as what rights they have over the other party.

how to write up a loan agreement

A loan agreement is a legal document that outlines the terms and conditions of a loan. It is usually written by the lender, who then serves it upon the borrower. The agreement can be written in many different ways, but it should include all of the following:
- The identity of both parties;
- The nature and purpose of the loan;
- The interest rate and repayment schedule;
- The amount to be borrowed and its value;
- Legal terminology such as "lien" or "mortgage".

how do i write a personal loan agreement

A personal loan contract is a document that specifies what the borrower is to do in order to repay the loan. It can be used for loans of any amount and for any purpose.
If you're looking for a way to structure your loan agreement, consider these steps:
1) Determine your goals.
2) Determine what you need from the agreement.
3) Write your terms and conditions.
4) Organize your document into sections and subsections.

How do I convert this personal loan agreement template word?

To convert this personal loan agreement template word to other file types, use the Download Contract button, type in your name and email address, and receive the template file in your inbox.
Then, customize the bracketed sections by adding your own content, and review the rest of the contract. Once it is to your liking, use the file saving options on your program or a file converting website to save it as your desired file type.

can you cancel a personal loan agreement?

The best thing to do if you are looking to cancel your personal loan agreement is to read your contract thoroughly and get in touch with your lender. You can also review your options with a licensed attorney to make sure you understand your obligations and options.

how to draft a personal loan agreement

A personal loan agreement is a document that will be signed by both parties, which will outline the terms of a loan. It also includes information on how much money you are borrowing, interest rates and repayment schedules.
The agreement should be drafted with the following in mind:
- The amount of money you are borrowing and how long it will take to pay back.
- The interest rate.
- The repayment schedule.

how do i write a simple personal loan agreement

A loan agreement is a legal contract between two parties to lend money or property to a third party. It is most often used for financing purposes, and it is typically a legal document that contains the terms of the loan.
The key sections of a personal loan agreement are:
- The term, which gives both parties an idea of how long they will be borrowing and repaying money
- The principal amount, which is how much money you are borrowing
- The interest rate, which is how much you will be paying back in interest each month
- A description of what happens if you fail to pay back your loan on time

how to write a loan agreement with collateral

A loan agreement is a legally binding contract between two parties. It outlines the terms of the loan and all of its obligations. The following are some tips to help you write a loan agreement with collateral:
- Make sure that you have a clear understanding of what you want to borrow and what you will be lending out.
- Write your agreement in plain language, without jargon or legal terms.
- Keep your contract short and concise, while still including all necessary information in it.

how to write a simple loan agreement

To create a simple loan agreement, make sure your contract includes a description of the loan, the terms of repayment, the amount that will be borrowed, and how much will be repaid over time. It also includes the interest rate that is to be applied to repayments on the loan, as well as any fees or penalties that may apply if not paid in full on time.

how to write up a personal loan contract

A personal loan agreement template will specify how much money will be given to the borrower and when they will have to pay it back. It can also specify what happens if they fail to pay back the loan on time.
Here are some things that you should keep in mind while writing a personal loan agreement:
- Ensure that all terms are clearly defined in your contract.
- Make sure that all clauses are written in plain language so there is no room for misinterpretation.
- Include an escape clause so that if something goes wrong, both parties can exit the contract without penalty.

how to write a contract for a personal loan

When writing a personal loan contract, make sure that you know what is included in the contract and what is not included. Ensure you understand all of the terms of your loan agreement so you don't have any regrets later on.
It's important to make sure that your contract is written in plain language so it's easy for anyone to understand without having any complications in understanding it. It's also important to keep track of all the changes made through time so that if something changes after signing your contract, you can go back and amend it accordingly.

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